I'm a brand new wholesaler with just two months in this game (extreme newbie) and I'm trying to wrap my head around something. I found what appears to be a promising deal with a landlord who wants to sell her home for $50k in a prime location in Tampa, FL. She has relocated out of the country with her family, so it appears she might be the motivated seller I've been looking for. My intention is to get this deal via assignment, with a $50 earnest money deposit to her (which I hadn't yet worked out as to how I could give her the EMD since she is out of the country...but I was thinking PayPal ). At any rate, we've been communicating over e-mail for a few days and I tried to get the ball rolling by finally asking her "If I were to take this house as is and close in 45 days, what is the absolute lowest you would be willing to sell it for?"
Her response: "First, I should let you know that I do not want to go through escrow".
Now, I'm a little puzzled. Aren't escrows required by law? I cannot seem to get a definitive answer as it relates to Florida. Secondly, if she's not even interested in escrow, how can I even work this deal where she would even be willing to wait at least 30 days for me to find my end buyer? I'm just trying to find a safe way to keep this opportunity alive.
Thanks in advance for your input and sharing with me your experience.
Are you certain she owns the house?
@Doug Merriott Yes, I should have mentioned, I did my due diligence in the initial stages of my correspondence with her. The website for the Hillsborough County Clerk shows a "Deed in Lieu of Foreclosure" in which my prospective seller is the "Grantee", in consideration for $83k. Again, I stress, I am very new at this so my understanding of that document is that my prospective seller owns the rights to the house. Please correct me if I'm wrong. I appreciate the help with this!
First, if you know how, back track through the clerk of court's office to the prior transaction(s) both when she apparently sold the property with owner financing which led to the DIL, and the previous transaction where she first bought it. There may be a mortgage in her name, and other liens/judgments from when she first owned it, and now owns it, and also some liens/judgments may have attached when the other person owned it. Also, get a title search, as a DIL doesn't eliminate any other liens, judgments, or additional mortgages. Secondly, ask this lady Why she doesn't want to "go through escrow", and what the owner believes "going through escrow" means. I suspect she said this because she knows there's some problem, can't give you clear title, and is looking to QCD it to you.
@Patrick L. Invests there, and probably knows the area. He can probably find any apparent title issues fairly quickly.
i wish i knew what escrow was. isnt eskrow just a down payment basically? or am i completely wrong
@Wayne Brooks Thanks for the feedback, and unfortunately it looks like you called it. I took a second look at the clerk site and found a more recent document (from last month) that clearly shows a Quit Claim Deed between her and Pneuma Group, LLC, consideration of $10. Clearly that's not good for me, but what does a QCD mean exactly? Thanks again for the heads up on that
@Wayne Brooks well more specially, in this scenario, would a QCD even work for a wholesale deal? would she even have had the rights to put the home under contract?
@Kimberly Anderson my initial thought was that the seller has owner financed the property a few times, will sell to you for a low price, high terms and hope that you default so she can take the property back DIL and keep your deposit.
Reading through the scenario though gives me another indication.
Hillsborough has a pretty powerful records search page, start here. You can search court records on the specific person. This includes deeds, liens and lis pendens. I ran your Pneuma Group and did not see anything but a bunch of deeds to them from Suman Nott, who is an owner of Pneuma according to Sunbiz.org, our Florida Corporation search page. Searching Suman Nott, there is a boatload of court records, mostly deeds and mortgages.
At any rate, professionals are involved and you should really find a good wholesaler in Tampa, a Title Company or even a Realtor could help you look at all the specifics and see if you are on to something or should run away.
@Doug Merriott as I suspected, she's looking to QCD to some sucker which is why she doesn't want a title co, looking at it. This is why title searches are a must,
Hi @Kimberly Marie
Without making any assumptions as to the sellers intentions, the situation as I see it is she wants to sell the house for 50K cash just before leaving the country and she doesn't want the transaction to be handled by a third impartial party (the title company).
Being new myself, if I were in your shoes, I wouldn't do anything without escrow just for the reason that a title company will alert you to any pitfalls. If everything is legit, she shouldn't have an issue with it.
You need to find out what her objection is to using escrow, if it has to do with closing costs, write your contract to say you will pay all closing costs which you will pass on to your buyer.
Quick way to end your wholesaling career before it starts would be to pass a major issue on to your buyer.
Keep us posted on how it goes!
@Doug Merriott I thought I did my research but now that I think of it I was primarily searching for the property address from the tax collector site, solely focused on what was going on with the house,got her full name from there, went to the clerk site, and didn't really think there was a major red flag because nothing immediately tied to that property. Now I know I have to really dig into the owner's history to get the full picture. And that sun biz site is another good resource I'll be bookmarking. Thank you for your help!
@Michael Olesky I will definitely be backing away from this one. I don't mind putting in the work, but considering she's out of the country and has already tried to pull a fast one on me, I need to heed the warnings with this. Plus, I highly doubt any end buyer will go through a deal with me, a first timer, without escrow. You're absolutely right too, my career at this will easily go up in flames and I'm only 3 months in. I just can't take the risk.
And thanks for calling it @Wayne Brooks
I think that is the right call @Kimberly Anderson Just like any other business, you have a way that you do business that the customer needs to conform to. My explanation to her would simply be "we use escrow for all transactions to protect all parties, if you the seller won't agree to use escrow then I'm afraid I'm not your buyer. However, if you are fine with using escrow then lets get the paperwork started and escrow opened so I/my investors can purchase your house."
Keep combing through those leads, you'll find a good one!
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